Oregon to Change its Foreclosure Laws in 2013, Requiring Foreclosure Arbitration
Thursday, January, 24, 2013
According to RealtyTrac, a California-based real estate firm, in 2012, the rate of foreclosures in Oregon dropped 40%. That rate is expected to change further due to recent legislation requiring lenders to go through foreclosure arbitration before foreclosing on a home. Foreclosure arbitration is the process of allowing a non-biased, third party expert, known as an arbitrator, to hear the details of the dispute and make a legally binding judgment accordingly.
RealtyTrac further stated that although the rate of home foreclosures in the country dropped significantly in 2012, the signs of recovery were more prominent in states that instituted “non-judicial foreclosure” routes, in which lenders are able to foreclose on a home without going through the state’s court system. It is assumed that once a state’s court system becomes involved, it is more difficult for lenders to work through solutions with homeowners who wish to keep their homes and avoid foreclosure in the first place.
There are generally two different ways in which lenders can initiate foreclosure. The first is a non-judicial process, which is generally streamlined and takes less time and effort on behalf of the lender; the second is a judicial process that takes longer. Although the judicial process takes longer, states that use it show higher rates of foreclosures than states that incorporate a non-judicial process.
Oregon is not the only state showing such high rates of decline in foreclosures. Nevada registered the highest decline, at 57%, while Utah and Oregon followed closely behind at 40%. However, other states (such as New Jersey and Florida) saw an increase in the rate of foreclosures—55% and 53%, respectively. The states showing the greatest increase in the rate of foreclosures are generally the states that saw the highest rate of decline in house values